CIVIL LAW AND CIVIL PROCEDURE

Unlimited liability of LLP officials or the practice of removing the corporate veil in the Republic of Kazakhstan

Abstract

This paper examines the issues of holding LLP officials accountable for illegal actions against LLP and the need to regulate it not only within the framework of criminal and administrative legislation, but also through the inclusion of these norms in the Civil Code of the Republic of Kazakhstan and the Law of Kazakhstan «On Limited and Additional Liability Partnerships». To describe the activities of LLP officials, the term "corporate veil/curtain" is often used, which emphasizes the specifics of the status and capabilities of these categories of persons who can manage the company directly, as well as realizing the will of third parties, in fact, who are actual beneficiaries. This type of management in some cases leads to various kinds of abuse. Therefore, despite the existence of limited liability, in some cases there is an objective need to create mechanisms for removing such a veil. The importance of this issue is enhanced by the fact that the construction of a legal entity itself is a fiction that defies physical touch, the legal capacity of which is precisely realized through the actions of officials. There are indirect grounds in domestic legislation through which an attempt can be made to remove the corporate veil, however, the very concept and mechanism of implementation are practically absent or create an abstract understanding of those approaches that can be implemented in such cases. In this regard, this work is aimed at emphasizing the need for the creation and large-scale development of a mechanism for «removing the corporate veil/curtains», especially on the basis of the norms of the Civil Code of the Republic of Kazakhstan and the Law of Kazakhstan «On Limited and Additional Liability Partnerships". The justification uses successful foreign practice on this issue, focuses on the problems and suggests ways to solve them.